(RFE/RL)
August 24, 2006 -- The Uzbek government has stripped an Uzbek-Israeli joint venture of its exclusive rights to process a strategic metal and assumed a direct supervisory role over its export contracts.

The government-controlled vesti.uz website says the move to rein in Uzmetal Technology is a result of the joint venture's alleged failure to meet its commercial obligations.

But the move follows several controversial government decisions that have significantly affected other foreign companies and joint ventures.

Also in August, Uzbek authorities sought bankruptcy for a U.S.-Uzbek gold-mining joint venture, Zarafshan-Newmont, following authorities' ruling that the venture owed millions of dollars in back taxes and penalties. The U.S. partner has vowed to seek international arbitration, but has also signaled its willingness to sell its interest in the venture.

Uzmetal Technology was set up in 2000 as a joint venture between Israel's Metal-Tech and two Uzbek mining companies, according to vesti.uz.

The enterprise processes molybdenum concentrate, which is produced by the state-owned Almalyk Mining and Metallurgical Combinate (AGMK). Molybdenum serves to produce heat-resistant and corrosion-resistant alloys that are used in oil pipelines, aircraft, and missile parts. It is considered to have strategic importance.

The government ordered that all export contracts signed by Uzmetal Technology should now be put under its direct supervision, vesti.uz reported.